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Give rail freight a level playing field

01 December 2017

(Article by Philippa Edmunds, manager of Freight on Rail, as published in the ASLEF Journal in December 2017. Philippa is lobbying the Treasury, and the Department for Transport, pushing for a proper market place for freight in the UK)

Freight on Rail continues to make the case for rail and road to be treated equitably while the government makes its rail funding decisions for the next five year period from 2019 to 2024.

We believe that the government needs to recognise road costs – such as road congestion, road collisions, road damage and carbon dioxide and air pollution – in any discussion about rail freight costs because HGVs only pay 30% of these costs imposed on the taxpayer.

Therefore, there is a strong case for equivalently supporting rail through lower rail freight access charges and continued upgrades to the strategic rail freight network and other key routes in order to allow rail to compete more fairly with HGVs.

At the moment the system is far from fair – as the following points demonstrate.

Unlike lorry operators, rail freight operators pay separately for the use of the rail network. Lorries do not pay a charge – except in a very few specific cases – for use of the road network; the road network is, in effect, free at the point of use. Furthermore, fuel duty for HGVs has been frozen since 2011 whereas access charges have increased by more than 20% over RPI over the same period.

And yet rail freight projects have high benefit cost ratios compared to other transport projects; the gauge upgrades out of Southampton port increased rail’s market share from 29% to 36% within a year and had a benefit-cost ratio of 5:1.

That is why we are campaigning for parity between the modes. We are pressing the Treasury and the DfT to introduce a distance-based lorry charging system in its forthcoming review which could measure the full impact of trucks on the economy and on society instead of the existing old fashioned time-based system.

In order to highlight the extent of the market distortion between the two modes, Freight on Rail commissioned research, using the DfT’s own mode shift benefit values, which confirmed that HGVs receive an annual subsidy of around £6.5 billion, a figure in line with two other independent pieces of research. As a result the DfT’s rail freight strategy recognised this distortion in September last year:

‘[We] recognise the positive benefits of rail freight for the UK – including its environmental and air quality benefits relative to road freight and its impact on reducing road congestion. These benefits are not currently recognised in the track access charging.’

The socio-economic costs of HGVs will continue to be a huge problem to society, the economy, the taxpayer and the government. The largest HGVs, which make up more than half of all HGV traffic, will continue to use the current engine technology well into the next decade, according to the DfT.

Whereas rail freight offers a safer and cleaner alternative to these large HGVs; currently a quarter of the largest HGVs (by which I mean 5 axles +) are doing journeys over 300km so some of this traffic should be captive to rail – if it is fairly treated.